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E-Banking Assignment Help
E-Banking is one of the most important features of the 21st-century banking system. The other name of E-Banking Assignment Help is electronic banking or banking. This system has its root in PC banking. The delivery channel and mode of all kinds of transactions and banking activities of electronic banking is the internet. Transfer of funds, payment of bills, viewing checking and savings account balances, payment of mortgages and purchase of financial instruments and certificates of deposits, all can be done through the internet of an e-banking system (Hague et al, 2009).
Banking Assignment is started when different possibilities were being explored on how to use internet application in different fields of commerce. It is tough to distinguish whether the internet tool was implemented in banking for the bankers’ ease or for the customers’ convenience. But at the end of the day e-banking helps and increases the overall efficiency of the banking process and provides ease of access to the customers as well.
The advantage of internet Banking is manifold. It makes the banking process convenient. Internet banking is available to the customers for 24 x 7. The transaction can be made in geographically distant places in no time. From the banks perspective, internet banking has acted as a boon since the service cost has been reduced drastically with the help of internet banking (IAMAI’s, 2006).
Most of the bigger banks in the UK these days are announcing development or future implementation of transactional electronic banking services. Though there is not any specific pattern which can be observed to which different financial institutions are doing this. It is expected by the researchers that larger institutions will be implementing this service at its best due to their greater financial strength or skill sets. But, few bigger institutions, such as the Abbey National have not yet started to provide e-banking service to its customer base. Some may think that organizations which are very famous for their innovations would implement e-banking quickly. But, an institution which is considered innovative by lots of people, Firs\ Direct, was not amongst the institutions which launched e-banking at the outset. It surprised many people as it decided to follow the path of a ``fast follower' by launching trial PC-based service in the summer of 1997.
There are different ways in which internet banking helps the banks and their operations. These points will be discussed now:
Orr (1999) is of the opinion that electronic processing of banking activities has helped in drastically reducing the cost per transaction. DiDio (1998) has stated that the average transaction cost that a bank incurs is approximate $1.07. With the use of ATM, it gets reduced to $0.27. When internet banking is used for these types of transactions, it falls further to about a penny. With the help of electronic banking, the banks are also being able to provide their customers different bills through the Digital marketing. The delivering of bills through internet cost much less than the system of delivering paper bills. Irvine (1999) has fixed this figure somewhere around at 40%. This type of drastic cost cutting will help the cause of bankers as well as the customers. Not only they will be able to offer and use different costs at a highly reduced cost of banking and still implement efficient and varied services.
Forrester Research has recently done a survey where 61% of respondents have confirmed that it would be beneficial for them if banks were offering them the financial services which they actually want (Dixon, 1999). These days banks have started to keep in mind and use this knowledge of consumer interest. They have started to offer a bucket of various financial services which includes bill presentment and payment, financial planning, estate planning and other auxiliary services like insurance, loans, and brokerage services. The internet can act as a very important tool for merging of all these different financial services into a single offering which was unavailable before. Web sites of the banks can be used for this offering of converged financial services. It will increase the involvement of the customers to the banking. Hence, they will access the banking site more frequently and will patronize it. This increases the overall chance of the customer using the product. This gives rise to the better profitability of the bank. The underlying idea behind this process is to generate a loyal base of customers who will be using his / her bank for not only a single but various financial services. This way bundling of services will increase. This on one hand will cut down on the service cost and on another hand will increase the revenue per customer.
Offer Additional Services
The new trend in the banking industry and e-banking is making a financial portal available for customers of the bank. With the help of this portal concept, banks are able to play a new role in satisfying customers with their customized services. Only offering internet banking by having a presence in the e-world is not enough for the banks to secure a revenue stream. But they can do it by providing the customers with varieties of options and choices in products and services with the help of integration on the internet. As Wah said, banks can manage a better profitability by making internet offerings available to its customer base if they can successfully make and implement a financial portal where clients can see the details of different financial products and services and can actually subscribe to those services such as stocks and mortgages.
Internet Profit Generation
E-commerce management can be successfully integrated into already existing operations of different banks, it will help in cutting down the cost drastically and increase the profitability like never before. This process of cost savings can be initiated by automating the transactions which are frequently made by the customer, for example, funds transfers, payments, account balance inquiries, etc. Moreover, it will be possible for the banks to effectively retain more customers when they will start making services available to the customers which are value added. This can be efficiently done through the implementation of an effective e-banking process. The example of Wells Fargo bank clearly proves this point. When Wells Fargo started the online banking procedure and customers started using it, they were able to retain 50% more customers than they used to do previously. The positive experience that was caused due to internet banking increased the number of referrals from the existing customers and around 20% of new customers acquired by his bank was coming from the referrals from existing customers. Hence, the acquisition cost of the bank also reduced substantially (Meckbach, 1999).
According to some research works, the demographics of clients who access internet banking very frequently are enticing. In the case of Wells Fargo bank, customers who use the banking often have an annual average income of $75,000. Their average level of education is also higher than that of the average Wells Fargo customer (Hoffman, 1999a). The group of customers who use the internet banking is more profitable than the customers who use traditional banking only. The amount of revenue generated by this group is 1.5 times of that of the average Wells Fargo customer. Their account balance is also 20% more than their brick and mortar counterpart at any point in time. Not only that, these clients use 50% more products and are more loyal to the bank which is indicated by their attrition rate which is 50% of the attrition rate of the total customer base. Furthermore, on average, it costs 14% less to service these customers as compared to bricks-and-mortar customers (Timewell and Kung, 1999).
E-commerce management is a banking is much cheaper than conventional banking due to the fact that rent of cyberspace is much lower than that of a physical branch. Due to this cost benefit, customer service of the banks are getting benefitted at the end of the day. This can be explained by the example of a USA based e-bank Wingspan.com and its conventional parent bank. The interest rate that Wingspan.com offers for checking accounts is 4.5% with a comparison to Bank One’s 1%. The number of choices offered in the field of mortgage and insurance by the bank is also significantly more than its brick and mortar based parent bank. Wingspan.com has tie up with 60 leading companies and 15 insurance vendors. (Osterland, 1999).
Conclusion and recommendation
Practitioners and researchers agree that internet banking will be hugely instrumental in the development of retail and other forms of banking in near future. It is estimated that within next decade more than 60 per cent of retail banking transactions will be through the internet. Customers, seating in their own home, can change the bank they have accounts in with single click on the websites. Hence, it can be understood that for surviving in the highly competitive Business Finance with online home banking facility, today’s retail banks will have to earn customer loyalty through product features and service excellence, They can‘t afford to sit back and enjoy loyalty which generally comes from the inertia of the customers. On the other hand, they need to inform the customers about the security risks those are attached with the process of e-banking. Not only this will help them in hedging their risk but also increase the transparency of the system.
- Bank Administration Institute and the Boston Consulting Group (1995), The Business Information Superhighway and Retail Banking, Bank Administration Institute, Chicago, IL.
- Hagel, J. and Armstrong, A.G. (1997), Net Gain, Harvard Business School Press, Cambridge and Boston, MA.
- Internet Computing Staff (1998), ``E-commerce: four to watch'', Internet Computing, March, p. 82.
- Johne, A.F., and Pavlidis, M.P. (1996), ``How banks apply marketing expertise to develop new derivatives'', Journal of Product Innovation Management, Vol. 13, pp. 440-52.
- ECB (2005) “EU Banking Structures”, October.